Fix prices of costly patented drugs by negotiated pricing: panel

Experts say negotiated prices will help big pharmaceutical companies make a stronger case against compulsory licensing of expensive drugs without making the drugs affordable. Photo: Pradeep Gaur/Mint

Updated: Wed, Feb 27 2013. 12 44 AM IST

New Delhi: A government panel has recommended that prices of expensive patented drugs should be determined by way of negotiated pricing.

Currently, there is no pricing mechanism for imported drugs in India.

The department of pharmaceuticals has invited comments from stakeholders on the recommendations made by the panel in the report on price negotiation for patented drugs.

Experts say negotiated prices will help big pharmaceutical companies make a stronger case against compulsory licensing of expensive drugs without making the drugs affordable.

“If the prices have to be decided by way of negotiations, why should the government get involved at all?” asked Sakti Selvaraj, public health activist with All India Drug Action Network. “Hospitals can individually negotiate prices when they purchase in bulk and get up to 20% discounts. Besides when the government starts fixing the prices, cases for compulsory licensing will also get weaker.”

The report states that, “there should be a committee headed by chairman of NPPA (National Pharmaceutical Pricing Authority) for deciding the price of patented medicines. The committee can be named as Pricing Committee for Patented Drugs.”

Currently, only prices on drugs categorized as National List of Essential Medicines are monitored in India. In public interest, the government can issue compulsory licence allowing another manufacturer to produce a patented drug without permission from the patent owner.

While the final decision on the pricing mechanism for patented drugs has been on the backburner, the government is considering compulsory licensing as a way of bypassing patent protection for expensive anti-cancer drugs. The health ministry has recommended that compulsory licenses be issued for three anti-cancer drugs belonging to Roche and Bristol Myers Squibb Company— trastuzumab, ixabepilone and dasatinib—to make them affordable for the common man.

“This report is balanced and keeps India’s position in the global market in mind while recommending a pricing formula,” said P.V. Appaji, executive director of lobby group Pharmexcil. “The government is not compromising on its promise to increase access to affordable drugs. In my opinion, the government should give a free hand to the National Pharmaceutical Pricing Authority. Each decision on pricing should be taken on case to case basis, looking at factors like availability of equivalent therapies in India,” he added.